20230628Notice_of_Application_Order_No_35830.pdf

NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
NOTICE OF SUSPENSION OF PROPOSED EFFECTIVE DATE
ORDER NO. 35830 1
Office of the Secretary
Service Date
June 28, 2023
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION

IN THE MATTER OF INTERMOUNTAIN
GAS COMPANY’S APPLICATION FOR
AUTHORITY TO UPDATE THE
RENEWABLE NATURAL GAS
FACILITATION PLAN
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CASE NO. INT-G-23-03

NOTICE OF APPLICATION

NOTICE OF
MODIFIED PROCEDURE

NOTICE OF SUSPENSION OF
PROPOSED EFFECTIVE DATE

ORDER NO. 35830

On June 9, 2023, Intermountain Gas Company (“Company”) applied for authority to
modify its Renewable Natural Gas (“RNG”) Facilitation Plan in three ways: (1) a new maintenance
fee applicable to RNG producers that need facilities to export natural gas to an interstate pipeline;
(2) develop a method for calculating the monthly access fee; and (3) clarify that the Interruptible
Distribution Transportation Service (“Schedule T-3”) tariff rate will apply to the transport of RNG
using the Company’s distribution system to any interconnection point with Northwest Pipeline.
The Company’s Application includes several supporting exhibits and requests an effective date of
July 1, 2023.
We now issue this Notice of Application, Notice of Suspension of Proposed Effective Date,
and set public comment and Company reply deadlines.
BACKGROUND
In Case No. INT-G-20-03 Order No. 34693, the Commission granted the Company
authority to facilitate access to RNG producers. The Company proposed an RNG Facilitation Plan
to guide access by RNG producers which includes monthly fees for access to the Company’s
distribution system consisting of a monthly Maintenance Fee and monthly Access Fee. The
Company anticipated the Maintenance Fee would be updated annually to ensure RNG producers
cover expenses necessary to operate and maintain required facilities and the Access Fee is intended
to provide a return to the Company as non-utility revenue.
Since approval and implementation, the Company has received requests from RNG
producers to access interstate markets utilizing Northwest Pipeline. To facilitate these requests to
NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
NOTICE OF SUSPENSION OF PROPOSED EFFECTIVE DATE
ORDER NO. 35830 2
export gas from Idaho, the Company needs to construct a new compressor station and related
facilities.
The Company notes that RNG producers who consume gas delivered from the Company
will be charged the tariffed rate. Because the RNG producers have expressed interest in accessing
the interstate markets, the Company plans to apply to the Federal Energy Regulatory Commission
for authorization to transport RNG across state lines subsequent to a final order in this case.
NOTICE OF APPLICATION
YOU ARE HEREBY NOTIFIED that in addition to the Maintenance and Access Fees
described above, the Company is proposing a new Export Facility Maintenance Fee (“EFMF”)
that would apply only to RNG producers in areas along the Company’s distribution system where
the load is insufficient to absorb the RNG without construction of additional export facilities to
transport the RNG.
YOU ARE FURTHER NOTIFIED that the Company would also charge extraordinary
startup and operations and management (“O&M”) Fees to any RNG producer necessitating the
additional costs not contemplated by the other fees.
YOU ARE FURTHER NOTIFIED that in totality, the Company is proposing Maintenance,
Access, EFMF, and extraordinary startup and O&M Fees for RNG producers wishing to access
interstate markets. The various fees—aside from the Access Fee—would ensure the Company’s
customers are not subsidizing RNG producers’ who access interstate markets through the
Northwest Pipeline.
YOU ARE FURTHER NOTIFIED that the Maintenance Fee is set at $2,300 per month
until September 30, 2023. The Maintenance Fee is updated annually to reflect changes required to
provide RNG producers’ access to the system. The Company calculates a new Maintenance Fee
using two components (1) an update to the monthly Maintenance Fee; and (2) a Maintenance Fee
adjustment. the update relies on the previous years’ RNG actual expenses distributed over the
following 12-month period from October 1 through September 30. The adjustment component
compares the actual expenses to serve RNG producers with the revenue generated from the
Maintenance Fee. The adjustment can be added to or subtracted from the new monthly
Maintenance Fee and is applied during the same period.
NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
NOTICE OF SUSPENSION OF PROPOSED EFFECTIVE DATE
ORDER NO. 35830 3
YOU ARE FURTHER NOTIFIED that the EFMF, as proposed by the Company, would
be updated annually and applied over the same 12-month period as the Maintenance Fee. The
Company would update the EFMF by comparing actual compressor station expenses with
revenues generated by the monthly EFMF. Like the Maintenance Fee adjustment, the EFMF
adjustment would be added or subtracted to RNG producers’ monthly bills depending on the prior
years’ expenses and revenues.
YOU ARE FURTHER NOTIFIED that the Access Fee was approved in Order No. 34693,
but a method was never established.
YOU ARE FURTHER NOTIFIED that the Company states the intent of the Access Fee is
to provide the Company a return for providing RNG producers access to its distribution system.
To calculate the Access Fee:
The Company proposes the calculation of a risk premium using a methodology
focused on Return on Equity (“ROE”) values as the basis for the Access Fee. FERC
released new policies for determining an ROE in 2020. FERC’s revised policy for
natural gas pipelines utilizes the Discounted Cash Flow and Capital Asset Pricing
Model methodologies to calculate the ROE, which is a disparate approach from the
utility ROE method. The Company’s proposed methodology for determining the
Access Fee is to compare the difference between the ROE per the FERC
methodology and the ROE from a utility ROE method. The difference is the Risk
Premium percentage. The Risk Premium is then multiplied by the average cost of
an RNG facility to determine the Risk Factor amount. The Risk Factor amount is
then grossed-up for any applicable charges, if any, to determine the Access Charge.

Application at 9. According to the Company this would generate a proposed Access charge of
$8,000 per month (the amount the Company is charging its existing RNG facilities).
YOU ARE FURTHER NOTIFIED that the Company asserts any RNG delivered to its
system from RNG producers must meet biogas standards which ensure any RNG delivered meets
the same quality as the natural gas provided by the Company.
YOU ARE FURTHER NOTIFIED that all revenues derived from the Facilitation Plan will
be included in the Company’s gross operating revenues.
YOU ARE FURTHER NOTIFIED that the Company’s Facilitation Plan does not currently
allow the Company to charge RNG producers for transportation to the interconnection point using
a tariffed rate. Therefore, the Company proposes updating Schedule T-3 so that the monthly rate
NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
NOTICE OF SUSPENSION OF PROPOSED EFFECTIVE DATE
ORDER NO. 35830 4
applies to RNG producers. The Company would treat the revenue collected under Schedule T-3
from RNG producers as an offsetting revenue credit for its next general rate case.
YOU ARE FURTHER NOTIFIED that to insulate utility customers, the Company
proposes to include the capital costs associated with RNG production projects in rate base, but
offset those costs with Contribution in Aid of Construction (“CIAC”) payments made by the RNG
producers.
YOU ARE FURTHER NOTIFIED that in Case No. INT-G-20-031 Order No. 34693, the
Commission granted the Company a limited waiver allowing the Company to gross up CIAC
payments to cover additional taxable income generated from CIAC payments. Under this waiver,
the Company is allowed to gross “up the RNG projects to account for the additional income tax
the CIAC revenue from RNG projects.” Id. at 12. “The income tax gross up is booked as utility
revenue to offset the additional income taxes.” Id. The Company proposes this waiver be extended
to export facilities necessary for injection of RNG to Northwest Pipeline.
YOU ARE FURTHER NOTIFIED that the Application and Attachments are available for
public inspection during regular business hours at the Commission’s office. These documents are
also available on the Commission’s website at www.puc.idaho.gov. Click on the “GAS” icon,
select “Open Cases,” and click on the case number as shown on the front of this document.
YOU ARE FURTHER NOTIFIED that all proceedings in this case will be held pursuant
to the Commission’s jurisdiction under Title 61 of the Idaho Code.
YOU ARE FURTHER NOTIFIED that all proceedings in this matter will be conducted
pursuant to the Commission’s Rules of Procedure, IDAPA 31.01.01.000 et seq.
NOTICE OF MODIFIED PROCEDURE
YOU ARE FURTHER NOTIFIED that the Commission has determined that the public
interest may not require a formal hearing in this matter, and it will review the case through written
submissions under the Commission’s Rules of Modified Procedure Rules 201-204 of the Idaho
Public Utilities Commission’s Rules of Procedure, IDAPA 31.01.01.201-204. The Commission
notes that Modified Procedure and written comments have proven to be an effective means for
obtaining public input and participation.

1 The Company’s Application mistakenly cites Case No. INT-G-23-03 but correctly cites Order No. 34693.
NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
NOTICE OF SUSPENSION OF PROPOSED EFFECTIVE DATE
ORDER NO. 35830 5
YOU ARE FURTHER NOTIFIED that persons desiring to state a position on this
Application may file a written comment explaining why they support or oppose the Application.
Persons who would like a hearing must specifically request a hearing in their written comments.
Persons shall have until July 26, 2023, to file written comments. Comments must be filed
through the Commission’s website or by e-mail unless computer access is unavailable. To
comment electronically, please access the Commission’s website at www.puc.idaho.gov. Click the
“Case Comment Form” and complete the form using the case number as it appears on the front of
this document. To file by e-mail, the customer must e-mail the comments to the Commission
Secretary and the Company at the e-mail addresses listed below. If computer access is unavailable,
then comments may be mailed to the Commission and Company at these addresses:
For the Idaho PUC:

Commission Secretary
Idaho Public Utilities Commission
P.O. Box 83720
Boise, ID 83720-0074
[e-mail]

Street Address for Express Mail:

11331 W. Chinden Blvd.
Building 8, Suite 201-A
Boise, ID 83714

For Intermountain Gas Co:

Lori A. Blattner
Intermountain Gas Company
P.O. Box 7608
Boise, ID 83707
[e-mail]

Preston Carter
Morgan Goodin
Givens Pursley LLP
601 W. Bannock St.
Boise, ID 83702
[e-mail]
[e-mail]
[e-mail]

YOU ARE FURTHER NOTIFIED that the Company must file any reply comments by
August 2, 2023.
YOU ARE FURTHER NOTIFIED that if no written comments or protests are received
within the time limit set, the Commission will consider this matter on its merits and enter its order
without a formal hearing. If written comments are received within the time limit set, the
Commission will consider them and, in its discretion, may set the same for formal hearing.
NOTICE OF SUSPENSION OF PROPOSED EFFECTIVE DATE
YOU ARE FURTHER NOTIFIED that, given the need for a reasonable amount of time for
Staff and the public to review and comment on the Company’s Application in this case, the
NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
NOTICE OF SUSPENSION OF PROPOSED EFFECTIVE DATE
ORDER NO. 35830 6
Commission finds it appropriate to suspend the Company’s proposed effective date of July 1, 2023,
until September 1, 2023 unless the Commission issues an earlier order. See Idaho Code § 61-
622(4).
O R D E R
IT IS HEREBY ORDERED that the Company’s Application be processed by Modified
Procedure. Persons interested in submitting written comments must do so by July 26, 2023. The
Company must file any reply comments by August 2, 2023.
IT IS FURTHER ORDERED that the Company’s proposed July 1, 2023, effective date is
suspended until September 1, 2023 unless the Commission issues an earlier order.
IT IS FURTHER ORDERED that the parties comply with Order No. 35375, issued April
21, 2022. Generally, all pleadings should be filed with the Commission electronically and will be
deemed timely filed when received by the Commission Secretary. See Rule 14.02. Service between
parties should continue to be accomplished electronically when possible. However, voluminous
discovery-related documents may be filed and served on CD-ROM or a USB flash drive.
DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho this 28th day of
June 2023.

ERIC ANDERSON, PRESIDENT

JOHN R. HAMMOND JR., COMMISSIONER

EDWARD LODGE, COMMISSIONER
ATTEST:

Jan Noriyuki
Commission Secretary

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